* Banco Santander (SAN.MC), Europe’s second-largest bank by market value, has sweetened a compensation deal for selected private-banking clients who lost money in Bernard Madoff’s alleged Ponzi scheme, according to people familiar with the matter.

* Silicon Valley posted a drop in employment and recorded a decline in per capita income in 2008 for the first time in several years, as the recession caught up with the technology-heavy region.

* With Lloyds Banking Group (LLOY.L) and the U.K. government seeking to calm fears that the bank will be nationalized, they face a problem that Lloyds can’t control: the souring U.K. economy.

* L‘Oreal SA (OREP.PA), the world’s biggest cosmetics company, reported a sharply lower profit for 2008, dragged down by weak sales in the U.S. and restructuring charges.

* Japanese Finance Minister Shoichi Nakagawa said he will resign from his post after passage of various budget bills.

* Two nuclear submarines -- one French and one British -- collided during a routine patrol in the depths of the Atlantic Ocean earlier this month, France and the U.K. said Monday. The collision raised concern among military experts and antinuclear campaigners.

* California legislators geared up for another late-night session to reconsider a proposal to close the state’s $42 billion deficit, after aborting a vote Sunday night because they failed to find one more Republican vote needed to approve a budget.

* John Malone’s Liberty Media LINTA.O was near a deal late Monday to invest in Sirius XM Radio Inc (SIRI.O) in return for a major stake.

* Microsoft Corp (MSFT.O) said a new version of its operating system for mobile phones will be available by year end as the company attempts to strengthen its offerings in the consumer market.

* In a sign that the recession is forcing phone companies to take bold measures to hold onto landline customers, Verizon Communications Inc (VZ.N) is considering a $5 monthly voice plan that would let customers receive calls but dial only 911 and Verizon customer service.

* Sonja Kohn, the head of a Vienna bank that lost billions in the alleged Bernard Madoff fraud, denied statements by the Massachusetts’s securities regulator that she received personal payments from a Madoff-linked brokerage firm.

* Small businesses, squeezed for cash and unable to get loans, are turning to an ancient payment system: barter.